12 března 2009

12/3 Swiss National Bank intervention - good for gold?

Besides the obvious negative implications for CHF, the Swiss National Bank's actions are potentially very bullish for gold. If other central banks respond by trying to weaken their currencies, then the obvious safe haven is gold. Beggar-thy-neighbor currency depreciation increases the spector of additional protectionist measures, which in turn is highly negative for legal-tender medium of exchange (i.e. paper currency).